Crypto Market Retracement Analysis: Resonance Effects of Security Concerns and Changes in the Global Economic Landscape

Recently, the crypto market has undergone significant adjustments, mainly due to two reasons:

Micro Level: Continuous Major Capital Loss Events

Last week, a certain trading platform and the Infini project experienced theft incidents, resulting in huge financial losses. Such security events raise concerns about traditional funds, triggering a rise in risk-averse sentiment. The capital flow of the BTC ETF shows that since the 21st, there has been a large-scale outflow of funds, reflecting the negative views of traditional investors. These events have become the fuse for this round of correction.

Macro Level: The Impact of Changes in the Global Economic Landscape

1. The U.S. fiscal deficit issue remains severe, which may affect its credit and financing ability.

2. The U.S. government is promoting efficiency improvements and spending cuts, which may put pressure on short-term economic growth.

3. The competitive landscape in the field of artificial intelligence is changing, impacting the valuations of US tech stocks. The valuations of Chinese tech companies are beginning to revert.

4. The trend of the US dollar still has uncertainties and may show a trend of being strong at first and weak later.

5. The potential impact of geopolitical conflicts and trade policy adjustments on inflation still requires attention.

These factors combined have raised concerns in the market about the economic outlook, putting pressure on risk assets. However, there has not yet been any obvious structural risk.

For investors, a barbell strategy can be adopted to enhance the anti-fragility of the portfolio. On one hand, allocate blue-chip cryptocurrencies or low-risk DeFi yields, while on the other hand, take small positions to buy high-volatility assets at low prices. If the market experiences excessive pullbacks, moderate positions can also be established.